Talking carbon with the big shots

Kate Eddy and myself just spent two days at the MCG where we attended the Carbon Market Institute (CMI) conference. The State Government of Victoria was kind enough to invite the two of us to give Kate access to carbon fund managers, investors and other interesting parties that might be relevant to Bush Heritage and to give me the opportunity to mingle with carbon companies and other revegetation mobs that might be interested in working in our Victorian priority landscapes.

The Carbon Market Institute is an umbrella organisation that promotes the interests of those that work in this field, both commercially as from the government. This includes revegetation companies, law firms, regulators, audit firms, investment firms, energy efficiency experts, green design companies, consultants, lobby groups, renewable energy firms and a lot of NGO’s. This conference attracts a lot of well informed people who live and breathe the carbon market and global warming issues and it was enlightening and confusing, depressing and uplifting, extremely interesting and deadly boring, all at the same time, listening to these people and their presentations. We mingled with Bernie Fraser, John Hewson, John Connor, Frank Jotzo, Greg Hunt, Christiana Figueras, John Thwaites, Ian Chubb and Mark Butler and listened to people from the legal, regulatory, energy, diplomatic, investment and scientific communities on what’s happening, what needs to be done and on the current opportunities and failures.

Here are a few things I learnt:

The chances of an international agreement at COP Paris 2015 are very high as the interests of the USA, Europe and China are lining up for the first time. Signals are that the three main powers are in agreement on what needs to happen next. It is expected that India, Russia, Brazil, Mexico, South-Korea and South-Africa will fall in line behind them, Japan is an unknown and that Canada and Australia are the only ones in the cold.

In the carbon market, the vast chunk of activity is in the energy efficiency and renewable energy corner. As an investor present put it to me: “why would I bother with trees if I can make a 15% return in 12 months on an energy efficiency deal?” This dichotomy was also made clear on the conference program, where only one session was reserved for the “land use sector”. This includes carbon plantings, soil and savannah burning. Interestingly, the soil carbon wasn’t touched on at all during this conference, even though it’s high on the government agenda.

Bush Heritage Australia has hardly any brand recognition in this carbon trading world. Only three people I spoke to knew who we were, and they were all from this land use sector. The Aboriginal Carbon Fund knew us thanks to Tom Vigilante’s work in the Kimberleys, the guys from Carbon Neutral knew us as their plantings were close to Charles Darwin, even though they said they knew Simon but not Luke, and one person representing carbon farmers knew Luke at CDR as his operation was close to there as well. All other people I spoke to did not know BHA, what we did or where we fitted in and so the conversation had to include a BHA intro first.

In general, the carbon trading world does not like the present government’s direction on global warming issues. Only two people out of some 150 speakers were positive about the “Direct Action” plan, and one of them was Greg Hunt himself. The other person was with Frontier Economics, an economy policy think tank. It was interesting hearing people like John Hewson, Ian Chubb and Bernie Fraser absolutely ripping the government to pieces on this. Hewson wasn’t too friendly about Labor’s policies either by the way. Many speakers spoke about the lack of certainty under both governments as the main obstacle in getting big investment streams released.

The MCG wastes a lot of energy as they were rolling out these science fiction machines over the pitch that were made up of countless batteries of low hanging lights that helped the grass grow when the sun went down and the tall stands were shading the lawn. All this while we were discussing cutting emissions inside. Coincidence or irony?

Despite the focus on fields outside BHA interests I did manage to make a few promising contacts in the “land use sector”. One was with Carbon Neutral, a carbon offsetter that does biodiversity plantings on behalf of volunteer offsetters. So far, all their plantings have been in WA, close to CDR, but now they want to come to the East Coast as well. They will come over soon so I can show them around our priority landscapes in NC Victoria and show them the land available and how that fits in the overall landscape. This contact alone was worth visiting the conference for me. I have also passed on Peter Saunders’ contact details to them for a contact in NSW.

The other party I talked to was the Aboriginal Carbon Fund (ABC). They’ve been very successful in their savannah burning programs up north. I talked to them about also going into carbon plantings down south and suggested I talk to our local Aboriginal organisation to get them to invite the ABC to Central Victoria to discuss possible cooperation on something commercial. Bush Heritage would then be advising on where in the landscape those possible plantings would go etc. Both parties have shown great interest as I have had both on the phone while writing this already, asking more questions. They now have each others contact details so that looks promising.

Finally I also ran into some older contacts from carbon planting and finance operators who did quite a lot of stuff around central Victoria around 5 years ago, but have been distracted by works in other states. They were interested in the planning we’ve been doing, the opportunities for more plantings that exist in central Vic and I have invited them over for a guided tour. With a bit of luck I might have rekindled interest and something good might come out of that.

Kate and I only crossed paths a few times as we were trying to mingle as much as possible and we both had slightly different reasons for being there. So I cannot report on her experiences, you’ll have to read her blog for that. Thanks to Rebecca Bailey of the State Government of Victoria for paying for our attendance.